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Tech Mahindra Ltd.

BSE: 532755 Sector: IT
NSE: TECHM ISIN Code: INE669C01036
BSE 10:34 | 09 Mar 977.40 8.85
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NSE 10:24 | 09 Mar 979.20 10.70
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OPEN 971.00
PREVIOUS CLOSE 968.55
VOLUME 23112
52-Week high 1081.35
52-Week low 470.25
P/E 21.20
Mkt Cap.(Rs cr) 94,612
Buy Price 977.00
Buy Qty 131.00
Sell Price 977.35
Sell Qty 70.00
OPEN 971.00
CLOSE 968.55
VOLUME 23112
52-Week high 1081.35
52-Week low 470.25
P/E 21.20
Mkt Cap.(Rs cr) 94,612
Buy Price 977.00
Buy Qty 131.00
Sell Price 977.35
Sell Qty 70.00

Tech Mahindra Ltd. (TECHM) - Auditors Report

Company auditors report

To the Members of Tech Mahindra Limited

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

OPINION

We have audited the standalone financial statements of Tech Mahindra Limited ("theCompany") which comprise the standalone balance sheet as at 31 March 2020 and thestandalone statement of profit and loss (including other comprehensive income) standalonestatement of changes in equity and standalone statement of cash flows for the year thenended and notes to the standalone financial statements including a summary of thesignificant accounting policies and other explanatory information (hereinafter referred toas "the standalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2020 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

BASIS FOR OPINION

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

EMPHASIS OF MATTER

We draw attention to note 36(B) of the standalone financial statements which describesin detail certain matters relating to erstwhile Satyam Computer Services Limited("erstwhile Satyam") amalgamated with the Company with effect from 1 April2011. The Company's management on the basis of current legal status and external legalopinion has concluded that claims made by 37 companies in the City Civil Court foralleged advances amounting to ' 12304 million to erstwhile Satyam and presentedseparately under ‘Suspense account (net)' will not sustain on ultimate resolution bythe Court as explained in the aforesaid note.

Our opinion is not modified in respect of this matter.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

description of key audit matter

Key audit matter How our audit addressed the key audit matter
Revenue recognition - Fixed price contracts Our audit procedures included:
The Company engages in Fixed price contracts including contracts with multiple performance obligations. Revenue recognition in such contracts involves judgments relating to identification of distinct performance obligations determination of transaction price for such performance obligations and the appropriateness of the basis used to measure revenue recognised over a period. Obtained an understanding of the systems processes and controls for evaluation of fixed price contracts to identify distinct performance obligations and recognition of revenue.
Evaluated the design and operating effectiveness of internal controls including IT controls relating to recording of the contract value determining the transaction price allocation of consideration to different performance obligations measurement of efforts incurred and process around estimation of efforts required to complete the performance obligations and the most appropriate method to recognise revenue.
In case of Fixed price development contracts where performance obligations are satisfied over a period of time revenue is recognised using the percentage of completion method based on management's estimate of contract efforts. The estimation of total efforts or costs involves significant judgement and is assessed throughout the period of the contract to reflect any changes based on the latest available information. These contracts may also involve recognizing onerous obligations that require critical estimates to be made by the management.
• On selected sample of contracts we tested that the revenue recognised is in accordance with the revenue recognition accounting standard. We
- evaluated the identification of performance obligations;
- considered the terms of the contracts to determine the transaction price including adjustments for any sums payable to the customer;
- determined if the Company's evaluation of the method used for recognition of revenue is appropriate;
In case of Fixed price maintenance contracts revenue is recognised either on a straight line basis or using the percentage of completion method or at an amount equal to sums billed to customer depending on the most appropriate method that depicts the value of service delivered to the customer.
- tested the Company's calculation of efforts incurred estimation of contract efforts including estimation of onerous obligation through a retrospective review of efforts incurred with estimated efforts;
- assessed appropriateness of contract assets/ unbilled revenue on balance sheet date by evaluating underlying documentation.
Further in some of the Fixed price contracts consideration may be payable to the customer. Determination of whether such consideration payable is for a distinct good or service or an adjustment to the transaction price is also a matter of judgement.
• Tested aged contract assets to assess possible delays in achieving milestones which may require a change in estimated efforts to complete the remaining performance obligations.
(Refer note 2.3 (i) 2.8 and 45 to the standalone financial statements). • Evaluated management assessment of the impact on revenue recognition and consequential impact on the expected credit loss allowance and other areas of judgement including for possible effects if any from the COVID-19 pandemic.
• Performed analytical procedures over revenue and receivables.
Evaluation of uncertain tax positions Our audit procedures included:
The Company operates in multiple global jurisdictions which require it to estimate its income tax liabilities according to the tax laws of the respective tax jurisdiction. Further there are matters of interpretation in terms of application of tax laws and rules to determine current tax provision and deferred taxes. • Obtained an understanding of the key uncertain tax positions.
• Obtained a list of updates to tax assessments and tax litigations during the year including management's assessment of the impact of these updates on the uncertain tax positions and assessment of possible outcomes. As a part of this procedure we also considered external legal opinions and consultations made by the Company for key uncertain tax positions.
The Company's tax positions are challenged by the tax authorities on a range of tax matters including corporate tax and transfer pricing. The Company has uncertain tax positions including erstwhile Satyam tax litigations.
• Involved our tax experts to test the current tax provisions inspect key correspondence and considered legal precedence and other tax rulings in evaluating the management's assessment of uncertain tax positions.
This requires Management to make significant judgements to determine the possible outcome of uncertain tax positions and consequently has an impact on related accounting and disclosures in the standalone financial statements.
• Evaluated the key assumptions in estimating current tax provisions and deferred taxes.
• Assessed and tested the presentation and disclosures relating to taxes.
Refer note 2.3 (ii) 2.12 and 48 to the standalone financial statements.
Investment impairment assessment Our audit procedures included:
The Company has investments in subsidiaries and associates. These investments are accounted for at cost less impairment. If an impairment exists the recoverable amounts of the above investment are estimated in order to determine the extent of the impairment loss if any. • Evaluation of impairment risk and assessing whether triggers exist for any investment based on consideration of external and internal factors affecting the value and performance of the investment.
• Obtained management assessment of recoverable amount for investments where impairment risk is identified.
Determination of triggers for impairment in value of these investments and recoverable amount involves significant estimates and judgements including those related to the possible effect of the COVID-19 pandemic. • Where management has used an independent valuer evaluated the independent valuer's competence capabilities and objectivity and assessing the valuation methodology used by the independent valuer to estimate the fair value of investments.
Refer note 2.3 (iv) 2.7 and 34 to the standalone financial statements. • Evaluated the mathematical accuracy of the cash flow projection and assess the underlying key assumptions in management's valuation models used to determine recoverable amount considering external data including assumptions of projected EBITDA revenue growth rate terminal growth rates discount rates and assessed the sensitivity of the assumptions on the impairment assessment and assessed the forecasts against the historical performance including the impact of the COVID-19 pandemic.
• Engaged independent valuation specialist to assist in the evaluation of assumptions and methodologies used by the Company in assessment of recoverable value of the investments.
• Assessed the appropriateness of the related disclosures in the standalone financial statements.

OTHER INFORMATION

The Company's management and Board of Directors are responsible for the OtherInformation. The Other Information comprises the information included in the Company'sannual report but does not include the standalone financial statements and our auditors'report thereon.

Our opinion on the standalone financial statements does not cover the Other Informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the Other Information and in doing so consider whether the Other Informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this OtherInformation we are required to report that fact. We have nothing to report in thisregard.

MANAGEMENT'S RESPONSIBILITY AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONEFINANCIAL STATEMENTS

The Company's management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit/loss and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act; for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the standalone financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Companyhas adequate internal financial controls with reference to standalone financial statementsin place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

(A) As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2020 from being appointed as a director in terms of Section164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference tostandalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31 March 2020 onits financial position in its standalone financial statements - Refer Note 30 to thestandalone financial statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on longterm contracts includingderivative contracts- Refer Note 24 to the standalone financial statements; and

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

(C) With respect to the matter to be included in the Auditors' Report under section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

For B S R & Co. LLP

Chartered Accountants Firm's Registration No: 101248W/W-100022

Jamil Khatri
Partner
Place: Mumbai Membership No. 102527
Date: 30 April 2020 UDIN: 20102527AAAAAL2546

ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT - 31 MARCH 2020

With reference to the Annexure referred to in paragraph 1 in "Report on OtherLegal and Regulatory Requirements" of the Independent Auditors' Report to the Membersof the Company on the standalone financial statements for the year ended 31 March 2020 wereport that:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a regular program of physical verification of its fixed assets bywhich its fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. In accordance with this program certainfixed assets were verified during the year and no material discrepancies were noticed onsuch verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company title deeds of immovable properties/leaseagreements in respect of immovable properties taken on lease are held in the name of theCompany except for the following:

particulars of immoveable property Gross Block at 31 March 2020 (iNR Million) Net Block at 31 March 2020 (iNR Million) Remarks
Freehold land located at Bahadurpally Survey No. 62/1A Qutubullapur Mandal Bahadurpally Village District- Ranga Reddy Hyderabad - 500043 measuring 581711 square meters 190 190 As per the information and explanations provided to us after payment of the stamp duty to the Registrar of the State of Andhra Pradesh the state split into Andhra Pradesh and Telangana due to which the jurisdiction of the registration office has changed. The final demand has not crystallized and the Andhra Pradesh High Court Order is not adjudicated
Leasehold land located at Survey no. 1(P) 3(P) 8(P) 40(P) 7l(P) 109 152(P) MIHAN SEZ Area Nagpur - 441108 admeasuring 518241 square meters 470 425 As per the information given to us the Company has not yet received the adjudication certificate. Mutation proceedings will be initiated after the adjudication certificate is received from the authority.
Leasehold land located at Plot No. S - 1 Maitree Vihar Road Chandrasekharpur Bhubaneswar-751023 admeasuring 55600 square meters 5 4 As per the information given to us the General Administration Department of Government of Odisha has not yet issued the letter communicating the transfer fees to be paid by the Company. On such payment the property will be registered in the revenue records.

(ii) The Company is a service company primarily engaged in providing informationtechnology and related services. Accordingly it does not hold any physical inventories.Thus paragraph 3 (ii) of the Order is not applicable.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under section 189 of theAct. Accordingly paragraph 3 (iii) (a) (b) and (c) of the Order are not applicable tothe Company.

(iv) In our opinion and according to the information and explanations given to usbased on a legal opinion obtained by management the Company has complied with theprovisions of Section 185 and 186 of the Act in respect of loans investments guaranteesand securities.

(v) As per the information and explanations given to us the Company has not acceptedany deposits from the public in accordance with the provisions of sections 73 to 76 of theAct and the rules made thereunder. Accordingly the provisions of paragraph 3(v) of theOrder are not applicable to the Company.

(vi) The Central Government has not prescribed the maintenance of cost records undersection 148 of the Act for any of the services rendered by the Company. Accordinglyparagraph 3(vi) of the order is not applicable.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees' StateInsurance Income Tax Goods and Services Tax duty of Customs Cess and other materialstatutory dues have generally been regularly deposited during the year by the Company withthe appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income Tax Goods andServices Tax duty of Customs Cess and other material statutory dues were in arrears asat 31 March 2020 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofIncome Tax Service Tax Sales Tax Value Added Tax Duty of Customs and Goods andServices Tax which have not been deposited by the Company on account of any disputesexcept for the following:

Name of the Statute

Nature of Dues

Gross amount ' million

Amount paid under protest' million

Period to which the amount relates

Forum where the dispute is pending
Income Tax Act 1961

Income Tax

40

-

2004-2005

Supreme Court
Income Tax Act 1961

Income Tax

5970

-

2002-2003 to 2007-2008

High Court **
Income Tax Act 1961

Income Tax

2890

-

2003-2004 to 2013-2014

Income Tax Appellate Tribunal
Income Tax Act 1961

Income Tax

61

-

2005-2006 to 2014-2015

Commissioner of Income Tax (Appeals)
Income Tax Act 1961

Income Tax

92

-

2002-2003 to 2010-2011

Assessing Officer #
Finance Act 1994

Service Tax

12977

224

2008-2009 to 2013-2014

Supreme Court
Finance Act 1994

Service Tax

3897

206

2004-2005 to 2014-2015

Customs Excise & Service Tax Appellate Tribunal
Finance Act 1994

Service Tax

4

-

2019

High Court
Andhra Pradesh VAT Act 2005/ Central Sales Tax Act 1956

Value Added Tax/ Sales Tax

232

83

2008-2009 to 2010-2011

High Court
Name of the Statute

Nature of Dues

Gross amount ' million

Amount paid under protest ' million

Period to which the amount relates Forum where the dispute is pending
Maharashtra Value Added Tax Act 2002

Value Added Tax

30

-

2008-2009 to 2013-2014 Joint Commissioner of Sales Tax (Appeals)
Central Sales Tax Act 1956

Central Sales Tax (Uttar Pradesh)

4

4

2008-2009 Additional Commissioner of Commercial Tax (Appeals)
Central Sales Tax Act 1956

Central Sales Tax (Gujarat)

12

7

2006-2007 to 2008-2009 Deputy Commissioner of Commercial Tax (Appeals)
Andhra Pradesh Value Added Tax Act 2005

Value Added Tax

1

1

2007-2008 20092010 to 2010-2011 Sales Tax Appellate Tribunal
Goods and Service tax 2017

Goods and service tax

8

-

January 2018 - March 2018 Joint Commissioner of Appeal-Pune States
Ghana - Internal Revenue Act 2000 and Income Tax Act 2015

Income Tax / Withholding Tax

144

95

April 2013 to March 2015 Commissioner General
Tax Code - Gabon

VAT and Income- tax

37

-

Jan 2013 to Dec 2015 Director General of Taxation
Tanzania Revenue Authority

VAT / Income tax / Withholding tax

94

2015 and 2017 Regional Manager of Tanzania Revenue Authority
Saudi Arabia - General Authority

Withholding tax

80

8

2007-2009 Manager at General Authority of Zakat and Tax
Philippines - Bureau of Internal Revenue

VAT/ Income Tax

6

6

2015-2016 Bureau of Internal Revenue
Uganda tax

VAT and Withholding tax

112

-

2013 - 2018 Uganda Revenue Authority

* Income tax demands are after set-off of advance taxes and carry forward losses.

** The above excludes Income-tax Draft Notices of Demand amounting to ' 7952 Millionand ' 9637 Million for financial years 2001-2002 and 2006-2007 respectively issued bythe Additional Commissioner of Income-tax under section 143(3) read with section 147 ofthe Income-tax Act 1961 against which the Company has filed its objections with theDispute Resolution Panel which is pending disposal.

# The Company is not aware whether the Department has filed an appeal against the same.

(viii) In our opinion and according to the information and explanations given to usthe Company did not have any outstanding dues to any bank government or financialinstitutions or any debenture holders during the year.

(ix) In our opinion and according to the information and explanations given to us theCompany has not raised any money by way of initial public offer or further public offer(including debt instruments) or term loans during the year. Accordingly paragraph 3(ix)of the Order is not applicable to the Company.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanation given to us andbased on our examination of the records of the Company the Company has paid/ providedmanagerial remuneration in accordance with requisite approvals mandated by the provisionsof section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable to the Company.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company all transactions with related parties are incompliance with sections 177 and 188 of the Act where applicable and the details of suchtransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partially convertible debenturesduring the year. Accordingly paragraph 3(xiv) of the Order is not applicable to theCompany.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with them during the year. Accordinglyparagraph 3(xv) of the Order is not applicable to the Company.

(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of India1934.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Jamil Khatri
Partner
Place: Mumbai Membership No. 102527
Date: 30 April 2020 UDIN: 20102527AAAAAL2546

ANNEXURE B TO THE INDEPENDENT AUDITORS' REPORT ON THE STANDALONE FINANCIAL STATEMENTSOF TECH MAHINDRA LIMITED FOR THE YEAR ENDED 31 MARCH 2020

REPORT ON THE INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE AFORESAID STANDALONEFINANCIAL STATEMENTS UNDER CLAUSE (I) OF SUBSECTION 3 OF SECTION 143 OF THE COMPANIES ACT2013

(Referred to in paragraph 1(A) (f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

OPINION

We have audited the internal financial controls with reference to standalone financialstatements of Tech Mahindra Limited ("the Company") as of 31 March 2020 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to standalone financial statements and such internal financialcontrols were operating effectively as at 31 March 2020 based on the internal financialcontrols with reference to standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India (the "Guidance Note").

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to standalone financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 (hereinafterreferred to as "the Act").

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone financial statements. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to standalone financial statements were established andmaintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to standalone financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tostandalone financial statements included obtaining an understanding of such internalfinancial controls assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the standalone financial statementswhether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withreference to standalone financial statements.

MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONE FINANCIALSTATEMENTS

A company's internal financial controls with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to standalone financial statements include thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of standalone financial statements in accordance with generally

accepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the standalone financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONEFINANCIAL STATEMENTS

Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial controls with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Jamil Khatri
Partner
Place: Mumbai Membership No. 102527
Date: 30 April 2020 UDIN: 20102527AAAAAL2546

   

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